The reorder point is the stock level at which you place the next purchase order, so the new units arrive at Amazon before the current ones run out. It equals average daily sales multiplied by your total lead time, plus safety stock to cover variation in demand and delivery. On FBA it also has to keep enough stock on hand to stay above Amazon’s low-inventory-level threshold, without holding so much that storage costs and aged inventory surcharges take the margin instead.
What are reorder point and safety stock?
Reorder point = Average daily sales × Total lead time (days) + Safety stock
Total lead time is every day between placing the order and the units being available for sale on Amazon: production, freight, customs, delivery to the fulfillment center, and Amazon’s receiving time. Receiving is the part planners forget. Use your own shipment history for it, not an estimate.
Safety stock is the buffer for days when sales run faster than average or shipments arrive late. A standard formula when demand varies from day to day:
Safety stock = Z × σ(daily sales) × √Lead time
σ is the standard deviation of daily sales over a recent period. Z sets how often you accept running short: 1.28 covers about 90% of cycles, 1.65 about 95%, 2.05 about 98%.
Worked example
A SKU selling 25 units a day on average, with a standard deviation of 8 units a day. Lead time: 20 days production, 18 days freight and customs, 7 days Amazon receiving, 45 days in total. Target: 95% of cycles without a stockout (Z = 1.65).
Safety stock = 1.65 × 8 × √45 = 1.65 × 8 × 6.71 = 89 units
Reorder point = 25 × 45 + 89 = 1,214 units
When available stock plus units already on the way drops to 1,214, place the next order.
How does order size affect Amazon fees?
Since 2024 Amazon has charged a low-inventory-level fee on standard-size FBA products whose stock runs too thin relative to sales. The fee applies per unit sold when historical days of supply falls below 28 days in both the short-term (30-day) and long-term (90-day) measures. Since January 2026 Amazon calculates it per FNSKU, so each variation is measured separately. Days of supply is average stock on hand divided by average units shipped per day. You can see both figures in Seller Central under FBA Inventory.
Between orders, average stock on hand is roughly safety stock plus half the order quantity. Compare two order sizes for the SKU above:
| Order quantity | Average on hand | Days of supply | Low-inventory fee risk |
|---|---|---|---|
| 750 units (30 days of sales) | 89 + 375 = 464 | 18.6 | High, below 28 |
| 1,500 units (60 days of sales) | 89 + 750 = 839 | 33.6 | Low, above 28 |
Frequent small orders look efficient for cash, but on FBA they can push days of supply below the threshold and add a fee to every unit sold. The other side of the range has its own costs: monthly storage on every unit, higher storage rates in Q4, and aged inventory surcharges on stock that sits too long. The target is a days-of-supply range, not a minimum.
What does a stockout actually cost?
For the example SKU at $6.00 net profit per unit, a 10-day stockout loses:
25 units × 10 days × $6.00 = $1,500 in profit
plus the sales rank and Buy Box position the listing loses while it is unavailable, which often take days or weeks to recover after restocking.
The safety stock that prevents most of those stockouts costs little by comparison. At an illustrative $0.40 per unit per month in storage, 89 units of safety stock cost about $36 a month.
When should you change the reorder point?
- When sales velocity changes. Recalculate average daily sales from the last 30 to 60 days, and adjust for seasonality you know is coming.
- Before peak season. Q4 velocity is higher and Amazon’s receiving times are longer, so both parts of the formula grow.
- When a supplier or freight route changes. A longer or less reliable lead time needs more safety stock.
- When Amazon limits capacity. If your storage limits won’t allow the full order, ship in smaller batches more often and watch days of supply closely.
Best practices
- Measure lead time from order placed to units available for sale, including Amazon receiving.
- Calculate safety stock per SKU from that SKU’s own sales variability.
- Size orders to keep days of supply above 28 on both Amazon measures, and below the point where aged inventory charges start.
- Track each variation separately. The low-inventory fee applies per FNSKU.
- Count units in transit when comparing stock with the reorder point.
- Review reorder points monthly and before every peak season.
Common mistakes
- Forgetting Amazon receiving time in the lead time.
- Using one safety stock rule for every SKU. Fast, volatile SKUs need more buffer than slow, steady ones.
- Ordering in small, frequent batches to save cash and triggering the low-inventory fee instead.
- Overcorrecting after a stockout and sending in several months of stock that runs into aged inventory charges.
- Planning per parent ASIN when stock and fees are measured per variation.
FAQ
How do I calculate a reorder point for Amazon FBA? Average daily sales × total lead time in days, plus safety stock. Include production, freight, delivery and Amazon receiving in the lead time.
How much safety stock should I keep? Enough to cover normal variation in daily sales over the lead time. The formula Z × σ(daily sales) × √lead time gives a starting point per SKU.
How do I avoid the low-inventory-level fee? Keep historical days of supply at or above 28 days on the 30-day or 90-day measure. The fee applies only when both are below 28, and new-to-FBA products are exempt for a period.
How many days of stock should I keep at Amazon? Enough to stay above 28 days of supply at all times, and not so much that units age into surcharge tiers. Many sellers aim for a range of roughly one to two months at Amazon, with more stock held upstream if needed.
Does the reorder point change in Q4? Yes. Both sales velocity and receiving times usually increase, so recalculate it before placing Q4 orders.
Conclusion
Reorder point and safety stock are two short formulas, and on FBA they carry more weight than in most retail settings, because Amazon charges for having too little stock as well as too much. Calculate them per SKU and per variation, from real lead times and recent sales, and size orders to keep days of supply inside the range where neither fee applies.
sellerboard’s inventory planner shows stock levels, sales velocity and days of stock left per product, and suggests when to reorder and how many units to order based on the lead time you set.
Fee thresholds last verified September 2026; confirm current rules and rates in Seller Central. Storage figures in the example are illustrative.
